According to Digitimes, leading CPU maker Intel has refused the demand from leading notebook makers to reduce the price of Intel’s Ultrabook CPU’s by as much as 50% in order to increase the latter’s profitability and sales. While Intel negated the possibility of a 50% cut, the company seemed to be ready to reduce the prices by up to 20% – that too for first tier notebook manufacturers. Smaller players in the segment have been left in the lurch.
Intel’s Ultrabook CPU’s would be powered by the new 22nm Ivy Bridge processors – although the first generation of Ultrabooks already uses Intels Sandy Bridge line up to get the work done. An example of such a notebook is the Samsung 9 Series machines. The first of the Ivy Bridge based devices would only arrive by the first quarter of 2012.
These CPU’s are designed to be used on pint sized notebooks which will offer the power of much larger sized machines. This is a segment which is largely seen to be straddled between a tablet and a full fledged notebook. With Netbook sales hitting an all time low thanks to the utter domination of the iPad, it remains to be seen if Ultrabooks can do the trick for PC makers. As an example of the kind of costs a notebook manufacturer incurs, as of today, if a vendor launches a Netbook based on an Atom Z670 CPU coupled with a with SM35 chipset, the total price of these two components add up to $95. This is as much as 40% of the total cost of the laptop. With just two major components taking over 40% of the cost, manufacturers are forced to hike the prices of the final product. In comparison, the Nvidia Tegra2 platform with the CPU and the chipset can be had for as little as $20. Now, imagine the price of an Ultrabook with more expensive processors, and we might as well see final prices of products shooting way past the $1000 mark.
The idea behind the Ultrabook range is to undercut Apple’s MacBook Air lineup which starts from $1000 and this intention might well be in jeopardy if Intel decides to remain adamant on its pricing.
